Maktaba Sacco Society Ltd v Victoria Chemutai Murgor

REPUBLIC OF KENYA IN THE COOPERATIVE TRIBUNAL AT NAIROBI TRIBUNAL CASE NO. E626 of 2025 MAKTABA SACCO SOCIETY LTD…..............……CLAIMANT/RESPONDENT -VERSUS- VICTORIA CHEMUTAI MURGOR……………..….RESPONDENT/APPLICANT RULING 1. This ruling dispenses the Notice of Motion Application dated 24th March 2026. The Application is supported by an affidavit sworn by the Applicant, Victoria Chemutai Murgor, and brought under Section 1A, 3, 3A of the Civil Procedure Act, Order 21 Rule 12(2) and Order 51 Rule 1 of the Civil Procedure Rules 2010. The Application dated 8th September 2023 seeks the following orders: a) Spent b) Spent c) The execution Warrants of attachment dated 5th March 2026 be vacated and/or set aside for being irregular on account of failure to issue and serve the mandatory Notice of Entry of Judgment. d) The Respondent be ordered to deduct the amounts paid by the Applicant on her account since the institution of the suit from the Total Payable amount. e) Upon adjustment in terms of prayer 3 above, The Applicant be allowed to liquidate the decretal sum in monthly installments of not less than Kshs 70,000/= till settlement in full; 2. The Application is premised on the grounds on its face which are inter alia that: The Applicant was served with warrants of attachment on 23 rd March 2026 and is at risk of having her movable properties attached and sold, despite having made regular monthly loan payments which the Respondent allegedly failed to disclose to the Court, thereby misstating the amount due. She further contends that the mandatory notice of entry of judgment was not served, rendering the execution irregular. The Applicant maintains that she has always been willing to settle the decretal amount through monthly instalments and, upon being served with the pleadings, instructed her advocates to negotiate an out-of-court settlement, during which a substantial amount had already been received, but the Respondent proceeded with execution without disclosing the negotiations to the Court. She therefore seeks priority hearing and orders allowing her to pay not less than Kshs. 70,000 per month until the decretal amount is fully settled, to avoid attachment and sale of her movable property, and submits that the application is made in good faith with a reasonable proposal to settle the matter without unnecessary litigation. 3. The Claimant Respondent filed a Replying Affidavit dated 1st April 2026. In their reply, the Claimant/Respondent, denies the Applicant’s allegations and maintains that the judgment and subsequent execution were lawful and regular. It contends that the Applicant was duly notified of the proceedings and entry of judgment through the Judiciary Case Tracking System after she failed to enter appearance or file a defence despite being served with summons. The Claimant further states that the Applicant has admitted the loan but has made only sporadic payments, leaving a substantial outstanding balance, and argues that her payslip demonstrates sufficient financial capacity to repay the debt. It maintains that the Applicant’s proposal to pay Kshs. 70,000 per month is inadequate and amounts to an attempt to delay execution, noting that previous settlement and restructuring proposals were not accepted. The Claimant therefore argues that the Applicant has failed to meet the legal threshold for stay of execution and proposes, without prejudice, that she first pay at least Kshs. 1,000,000 in a lump sum, with the balance settled within the current year. It consequently urges the Tribunal to dismiss the Notice of Motion with costs and allow execution to proceed. 4. The matter was canvassed by way of written submissions and both parties filed their submissions. 5. In their submissions, the Respondent/Applicant submits that the decretal amount arose from a loan which she has acknowledged and has been making payments towards, with a substantial amount already paid, and seeks permission to clear the outstanding balance through monthly instalments of not less than Kshs. 70,000. She challenges the execution proceedings on the ground that the mandatory Notice of Entry of Judgment was not served before execution commenced, rendering the warrants irregular, and relies on the cited authorities to argue that the Tribunal has discretion under Order 21 Rule 12 of the Civil Procedure Rules to allow payment by instalments where the circumstances justify it. She maintains that she has acted in good faith, complied with the Tribunal’s directions, engaged in genuine settlement negotiations and is committed to clearing the debt, while arguing that immediate attachment and sale of her property would be harsh and disproportionate. The Applicant therefore urges the Tribunal to exercise its discretion in her favour by allowing payment of the decretal sum in manageable instalments, submitting that this would balance the Claimant’s right to recovery with her ability to satisfy the decree. 6. The Claimant/Respondent opposes the Applicant’s application, arguing that the execution of the decree was regular and that the Applicant had knowledge of the judgment and proceedings, having been served with summons and subsequently engaged in settlement negotiations and made payments towards the debt. It submits that the Applicant has admitted the debt but has a history of inconsistent repayment, failed to take advantage of previous settlement opportunities, and only sought the Tribunal’s intervention after execution commenced. The Claimant further argues that the proposed monthly instalments of Kshs. 70,000/= are unreasonable, unsupported by security and would unduly prolong repayment, while causing prejudice to the SACCO, its members and guarantors. It maintains that the Applicant has demonstrated financial capacity to make more substantial payments and that the Tribunal’s discretion to allow instalments should not be used to reward prolonged default. The Claimant therefore urges the Tribunal to dismiss the application with costs and allow execution to proceed, or alternatively, if instalments are permitted, require the Applicant to immediately pay at least three-quarters of the outstanding decretal balance and clear the remainder within strict timelines. ANALYSIS 7. This Tribunal has noted the application and the submissions with regards to this application. It is not in dispute that default judgment was entered in favour of the Claimant as against the Respondent. The decretal sum is also not disputed, and neither is the liability of the Respondent/Applicant towards the Claimant. The question before us, therefore, is whether the Applicant is entitled to the prayers sought to wit vacating warrants of attachment, ordering balancing of accounts and payment by instalments of at least Ksh. 70,000/- per month. 8. On the first question of vacating the warrants of attachment, the Applicants makes this prayer because she contends that she was not served with notice of entry of judgement. The requirement for service of Notice of Entry of judgement is contained in the proviso to Order 22 Rule 6 which provides that; Provided that, where judgement in default of appearance or defence has been entered against a defendant, no execution, attachment or eviction shall issue unless not less than ten days’ notice of the entry of judgement has been given to him either at his address of service or served on him personally and a copy of that notice shall be filed with the 1st application. 9. In Langer v Mutambu & another (Civil Case 303 of 2011) [2023] KEHC 25372 (KLR), the court noted that “It is plain from the rule that the notice is to be served where judgment is entered in default of appearance or defence. The rational for requiring service of a notice is to make the defendant aware of entry of judgment against him and the impending execution so that to obviate being taken by surprise. The defendant may take steps to challenge the default judgment in the event he disputes service of summons or even opt to pay to avert the impending execution.” 10. Further in Odek v Nyang’oro (Environment and Land Case Civil Suit E019 of 2023) [2025] KEELC 193 (KLR), the court when confronted by the question of non-service of the notice of entry of judgement said “I find that, as submitted by Counsel for the Appellant, failure to issue Notice of Entry of Judgment is a ground for stay of execution and not a ground for setting aside judgement. The provision is intended to give a judgement-debtor Notice should he/she wish to settle the judgement before execution. Notice of Entry of Judgement may as well be notice of existence of the suit and the judgement in case where the Defendant had not been served with the Summons to Enter Appearance.” 11. From the above authorities, it is clear that notice of Entry of Judgement, when there has been judgement in default is crucial to enable the other party be aware of the judgement, and apply to court to set the same aside, apply for review or even appeal the same. In other words, to have them informed and avoid the surprise of the execution process. In this case, there is no dispute that the Claimant Respondent did not serve the notice of entry of judgement. According to them, the Applicant would be made automatically aware of the same through the CTS. However, we note that the law requires personally serving of the same, and also that if the Applicants did not appear and take part in the proceedings, this being a judgement in default, there is no way they would be notified through the CTS. The prayer to vacate the warrants of execution thereby succeeds. 12. On the second prayer of balancing of accounts, we find that this is a straight forward prayer, as it is the right of every member to access the books of accounts concerning them, and that it is the natural consequence of every loan agreement that the loanee is informed how much loan is due after due calculation. 13. On the third prayer of payment by instalments, this court seeks counsel in the case of Tarpo Industries Ltd vs Picasso Products Limited where the Court held that: - “The Judgment debtor’s bond fides (good faith) is the most important consideration when the Court considers whether some indulgence can be fairly given to the judgment debtor without unreasonably prejudicing the decree-holder.” Further in the case of Lavington Security Limited vs Nairobi City Water & Sewerage Co. Ltd (2014) eKLR, the Court defined what amounts to “sufficient cause” to include: the debtor is unable to pay lump sum, the debtor can pay by reasonable monthly installments and the application is made in utmost good faith. 14. After considering both sides in this matter, we note that the indebtedness is not disputed. We also note that the Applicant has been repaying the loan from time to time, even before the execution was initiated. The Applicant also prays that she be allowed to pay at least Ksh. 70,000 per month. We note that the only solution to a debt is repayment. A cooperative Society’s property do not belong to its officials, but belongs to all the members. Therefore, deprivation or default in repayment, is a deprivation to all the members. We also note that since we have set aside warrants of execution, we have to tailor a way for the debt to be settled without prejudicing any of the parties. 15. In the upshot of the foregoing, we make the following orders; a) The warrants of attachment dated 5th March 2026 are hereby vacated. b) The parties are hereby ordered to balance and update the Applicant’s loan account within 14 days of this ruling. c) The Judgement Debtor to settle the decretal sum in instalments of Ksh. 120,000 per month, payable by the 5th day of every month starting with the month of October 2026 after the accounts have been settled. d) No order as to costs. Ruling signed, dated and delivered virtually at Nairobi this 3rd day of September, 2026. Hon. J. Mwatsama Chairperson Signed 3.9.2026 Hon. Beatrice Sawe Member Signed 3.9.2026 Hon. Fridah Lotuiya Member Signed 3.9.2026 Hon. Paul Aol Member Signed 3.9.2026 Hon. Michael Chesikaw Member Signed 3.9.2026 Tribunal Clerk J. Mutai